American retailers have suffered their worst monthly drop in sales on record as cash-strapped shoppers cut back on unnecessary spending to prepare for a long, tough winter of recession.

Official figures showed a 2.8% slump in US retail sales during October - the worst since statistics began in their present form in 1992, although economists attributed part of the fall to an easing in petrol prices.

The clothes chain Abercrombie & Fitch, renowned for its all-American models in provocative poses, became the latest US firm to mark down prices. Its downbeat message followed a profits warning from the electronics retailer Best Buy this week and a bankruptcy filing by rival Circuit City. Experts said there was clear evidence of anxiety among consumers.

Anika Khan, an economist at the US bank Wachovia, said: "These figures are definitely at recessionary levels and they definitely reflect a pull-back from consumers on big-ticket items. "Consumers are very predictable. During a recession, they stop spending on discretionary items and start shopping for bargains."

In California, the electronics firm Sun Microsystems said it was shedding between 5,000 and 6,000 jobs, amounting to 15% to 18% of its global workforce, to align itself with "global economic realities".

As gloomy news filtered through to Wall Street, shares dropped sharply. By midday in New York, the Dow Jones Industrial Average was down by 339 points to 8,495.